Editor’s note: In this four-part series, Inman News examines the effect of the housing slowdown on everyday real estate business. We’ve asked brokers and agents what they are doing differently with marketing now that listing times are longer, how they are keeping an edge, and how a slowdown may or may not be impacting commission rates. (Read Part 1, Part 3 and Part 4.)
As Web sites offering to help consumers buy and sell homes continue to pop up all over the Internet, real estate brokers and agents are finding themselves justifying their existence — or at least their commissions.
Real estate professionals know they have insight into local markets and experience that can help buyers and sellers close a deal at the best price. But with consumers now able to perform many of the tasks they once relied on real estate agents for, full commissions can be a tough sell.
Now, brokers and agents are discovering that with the right tools, technology can help them mine data in more sophisticated ways than consumer Web sites allow. Technology — especially when combined with their own knowledge and insight — can help brokers and agents convince clients they have expertise buyers and sellers don’t want to be without.
“Many consumers feel extremely empowered — almost to the point where they have a false sense of security that they can find anything they want,” said Mark Spraetz, vice president of marketing and sales at Terradatum.
Terradatum’s AgentMetrics and BrokerMetrics applications use MLS data that’s updated daily to help agents and brokers price properties, spot market trends, and analyze how they measure up against the competition. The programs produce easily understood charts and graphs that can be e-mailed to clients.
Most sites available to the public don’t have access to information that’s as detailed and current, Spraetz said. And none can return answers to specialized queries in a format that’s as useable and easy to understand, he said.
Another MLS platform — Technology Concept’s MyPlaceConnection — gives agents and brokers similar market analysis tools, and adds another dimension: the ability to peek at what their clients like and don’t like as they search the Internet for homes. MyPlaceConnection is a Web site where agents share information and collaborate with their clients online, letting the consumer take charge of the process while agents gain a better understanding of exactly what they are looking for.
When it’s time to close the deal, the Web-based transaction management system RELAY lets agents and their clients conduct business in the virtual world. RELAY, which was developed in partnership with the National Association of Realtors, gives clients 24-hour access to documents as a sale moves toward closing. At the end of the process, Realtors can hand their clients a CD-ROM holding all of their documents.
At first glance, Terradatum’s AgentMetrics and BrokerMetrics software applications may not seem revolutionary. The programs allow users to crunch MLS data, teasing out comparisons similar to those generated by spreadsheets like Excel. What makes the software valuable to clients like Realogy and Coldwell Banker Residential Brokerage is that it automates the process, putting a powerful tool in the hands of those who need it.
AgentMetrics and BrokerMetrics allow users to select fields they want to analyze, such as house type, geographical area, price, time on market and inventory, and generate reports with the click of a mouse. The programs generate charts and graphs in PDF formats that are easily e-mailed to clients.
Spraetz said Terradatum’s push-button, visual reports can help agents and brokers win clients by demonstrating how they stack up againstthe competition.
Want to know the agent or broker who’s sold the most condominiums in a particular ZIP code, city, or county in the last 12 or 24 months? How about who’s selling the most homes for $1 million and up? Terradatum’s applications will tell you.
The company’s products can also generate charts and graphs that demonstrate to a seller what is happening to properties similar to theirs, giving them confidence that the agent or broker knows where to set the price.
“Consumers can do their own market analysis based on public information available on the Web,” but not at the level of detail Terradatum’s MLS reports provide, Spraetz said. “A seller may see the guy across the street sold his house with the golf course view for $600,000, and so he thinks he should get that much for his ranch house. The agent, who has made a career in that neighborhood and gone to dozens of open houses, knows there is no way the client’s home will sell for what the golf course property did. But it’s a very hostile discussion, unless the agent goes in with the information” to make their case.
The ability to synthesize two years of information into a dozen charts with the click of a mouse is also useful to buyers. An out-of-town buyer trying to choose between two similar homes in different subdivisions might be grateful to learn that homes in one neighborhood have appreciated much more rapidly than the other, for example.
Branch managers and their supervisors can also use BrokerMetrics to evaluate the performance of individual agents, offices, or the company as a whole.
Some branch managers were promoted up through the ranks because they excelled at selling real estate. But it takes different skills to manage a team of agents, Spraetz said. The visual reports generated by BrokerMetrics make it easy for managers to spot trends, flag weaknesses, and boost productivity, he said.
BrokerMetrics helps managers “intuitively understand which agents aren’t performing, and if they are performing, how to help them improve,” he said. The colors used in a report, for example, can tip off a manager that an agent is only working with buyers. That can help them efficiently spend money earmarked for employee training and development.
“If one agent shows up all yellow, we’d know he does nothing but work with buyers,” Spraetz said. “If I … have a training program to develop listing skills, I’ll go through my roster and see who is all yellow. It works the same way for listing agents. If they are higher on listings taken, maybe I look for ways to get them to circulate among buyer groups, to improve the balance of business.”
Once managers have spotted trends, they can also drill down for more details. In a demonstration using actual MLS data, Spraetz generated a chart showing listings graphed according to price and days on market.
Properties represented by dots on the far right of the graph had been on the market for nearly a year. Clicking on any of the dots brought up more detailed information — including any price reductions.
One property Spraetz clicked on had a history of several price reductions, indicating good communication between the listing agent and seller, he said. Another had been on the market for months at the same price — an indication that the seller might need prodding by his agent, “Jeffrey.”
“Who’s driving the bus, Jeffrey — why aren’t you out there communicating?” Spraetz said, acting out the role of the agent’s broker.
Data mining can not only help the agent convince the seller to set a more reasonable price, but “help the agent decide when to walk, if they think the seller is being unreasonable,” Spraetz said.
About 60 percent of Terradatum’s clients are brokers with multiple offices, while the remaining 40 percent are single-office brokers (the company does not offer services to individual agents). Terradatum’s software is available in modules, with prices starting at under $100 a month.
Terradatum has access to about 35 percent of MLS listings in the U.S., covering most major metropolitan areas, and is adding three to five new markets a month, Spraetz said. As might be expected, there’s little data in some of the sparsely populated plains states. At the moment, the company is concentrating on expanding its service area in Florida.
With few exceptions, Terradatum has been able to expand its service area rapidly. Where there are obstacles — it took 18 months to convince the San Francisco MLS to share data — “we persevere,” Spraetz said. “We tell them this is strictly a tool for your members to use, it’s not for consumer access.”
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